Small businesses floundering in VAT and petrol prices

Once again, small businesses in the U.K. are taking the worst hit from the combination of rising fuel costs and the ubiquitous VAT, according to FSB national chairman, John Walker.  He said that the Federation of Small Businesses has been calling for the Conservative Party’s promised “stabilizer” on fuel prices, but no action has been taken.

The idea is that a system of adjustment would be put in place whereby the duty on fuel would be lowered when oil prices rise and increased when they drop.

The FSB also noted that on most of the continent, the price of fuel to consumers is split about half and half between the product itself and the tax on it, whereas in the U.K. the split is more like three to one, with the larger portion going to tax.  They said the U.K. also has Europe’s second-highest rate on diesel fuel, which makes it that much harder on businesses that depend on long and short-haul road transport.

Prime Minister David Cameron told reporters on Sunday that setting up an adjustment on fuel prices will be a difficult proposition.  He said the increase in duty was part of Labour’s programme, and with the deficit being what it is, the Coalition government couldn’t see a way to get rid of it.  The idea, Cameron suggested, is for the Treasury to “share the burden” of higher petrol costs with motorists, but the bottom line is:  the Treasury needs more revenue, from any source that can be tapped.

The issue is likely to heat up with protesters organizing rallies in a “fair fuel” campaign to let the government know that they’re seriously disappointed in the lack of action to support businesses struggling for survival.